☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 86-3078783 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Common stock, $0.0001 par value per share | KORE | The New York Stock Exchange | ||
Warrants to purchase common stock | KORE WS | The New York Stock Exchange |
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer | ☒ | Smaller reporting company | ☐ | |||
Emerging growth company | ☒ |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No As of 76,239,989 shares of the registrant’s |
Page No. | ||||||
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38 | ||||||
38 | ||||||
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38 | ||||||
38 |
Item 1. | Financial Statements (Unaudited) |
March 31 2022 | December 31 2021 | |||||||
(Unaudited) | ||||||||
Assets | ||||||||
Current assets | �� | |||||||
Cash and cash equivalents | $ | 31,914 | $ | 85,976 | ||||
Accounts receivable, net of allowances for credits and doubtful accounts of $2,417 and $1,800, at March 31, 2022 and December 31, 2021, respectively | 57,073 | 51,304 | ||||||
Inventories, net | 12,069 | 15,470 | ||||||
Income taxes receivable | 1,239 | 954 | ||||||
Prepaid expenses and other receivables | 7,661 | 7,448 | ||||||
Total current assets | 109,956 | 161,152 | ||||||
Non-current assets | ||||||||
Restricted cash | 370 | 367 | ||||||
Property and equipment, net | 12,167 | 12,240 | ||||||
Intangibles assets, net | 222,759 | 203,474 | ||||||
Goodwill | 426,700 | 381,962 | ||||||
Operating lease right-of-use | 9,050 | 0 | ||||||
Other long-term assets | 401 | 407 | ||||||
Total assets | $ | 781,403 | $ | 759,602 | ||||
Liabilities and stockholders’ equity | ||||||||
Current liabilities | ||||||||
Accounts payable | $ | 19,901 | $ | 16,004 | ||||
Accrued liabilities | 11,424 | 21,502 | ||||||
Current portion of operating lease liabilities | 2,027 | 0 | ||||||
Income taxes payable | 959 | 467 | ||||||
Deferred revenue | 7,020 | 6,889 | ||||||
Current portion of long-term debt and other borrowings, net | 3,206 | 3,326 | ||||||
Total current liabilities | 44,537 | 48,188 | ||||||
Non-current liabilities | ||||||||
Deferred tax liabilities | 36,443 | 36,722 | ||||||
Warrant liability | 259 | 286 | ||||||
Non-current portion of operating lease liabilities | 7,430 | 0 | ||||||
Long-term debt and other borrowings, net | 414,026 | 399,115 | ||||||
Other long-term liabilities | 3,624 | 3,148 | ||||||
Total liabilities | $ | 506,319 | $ | 487,459 | ||||
Commitments and contingencies | ||||||||
Stockholders’ equity | ||||||||
Common stock, voting; par value $0.0001 per share; 315,000,000 shares authorized, 76,239,989 and 72,027,743 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively | $ | 8 | $ | 7 | ||||
Additional paid-in capital | 427,378 | 413,646 | ||||||
Accumulated other comprehensive loss | (3,515 | ) | (3,331 | ) | ||||
Accumulated deficit | (148,787 | ) | (138,179 | ) | ||||
Total stockholders’ equity | 275,084 | 272,143 | ||||||
Total liabilities and stockholders’ equity | $ | 781,403 | $ | 759,602 | ||||
September 30, 2021 (unaudited) | December 31, 2020 | |||||||
Assets | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 72,689 | $ | 10,321 | ||||
Accounts receivable, net of allowances for credits and doubtful accounts of $1,601 and $2,804, at September 30, 2021, and December 31, 2020, respectively | 52,638 | 40,661 | ||||||
Inventories, net | 12,147 | 5,842 | ||||||
Prepaid expenses and other receivables | 14,540 | 5,429 | ||||||
Total current assets | 152,014 | 62,253 | ||||||
Non-current assets | ||||||||
Restricted cash | 367 | 372 | ||||||
Property and equipment, net | 12,630 | 13,709 | ||||||
Intangible assets, net | 212,633 | 240,203 | ||||||
Goodwill | 382,190 | 382,749 | ||||||
Deferred tax assets | 114 | 122 | ||||||
Other long-term assets | 458 | 611 | ||||||
Total assets | $ | 760,406 | $ | 700,019 | ||||
Liabilities, temporary equity and stockholders’ equity | ||||||||
Current liabilities | ||||||||
Accounts payable | $ | 20,522 | $ | 22,978 | ||||
Accrued liabilities | 26,362 | 17,209 | ||||||
Income taxes payable | 288 | 244 | ||||||
Current portion of capital lease obligations | 528 | 856 | ||||||
Deferred revenue | 6,797 | 7,772 | ||||||
Current portion of long-term debt | 3,153 | 3,161 | ||||||
Total current liabilities | 57,650 | 52,220 | ||||||
Long-term liabilities | ||||||||
Deferred tax liabilities | 34,580 | 42,840 | ||||||
Due to related parties | 1,122 | 1,615 | ||||||
Warrant liability | 273 | 15,944 | ||||||
Capital lease obligations | 304 | 508 | ||||||
Long-term debt | 378,356 | 298,404 | ||||||
Other long-term liabilities | 4,154 | 4,377 | ||||||
Total liabilities | $ | 476,439 | $ | 415,908 | ||||
September 30, 2021 (unaudited) | December 31, 2020 | |||||||
Temporary equity | ||||||||
Series A Preferred Stock; par value $1,000 per share; NaN authorized, issued and outstanding at September 30, 2021; 7,765,229 shares authorized, and 7,756,158 shares issued and outstanding at December 31, 2020 | $ | — | $ | 77,562 | ||||
Series A-1 Preferred Stock; par value $1,000 per share; NaN authorized, issued and outstanding at September 30, 2021; 10,480,538 shares authorized, 7,862,107 shares issued and outstanding at December 31, 2020 | — | 78,621 | ||||||
Series B Preferred Stock; par value $1,000 per share; NaN authorized, issued and outstanding at September 30, 2021; 9,090,975 shares authorized, issued and outstanding at December 31, 2020 | — | 90,910 | ||||||
Series C Convertible Preferred Stock; par value $1,000 per share; NaN authorized, issued and outstanding at September 30, 2021; 6,872,894 shares authorized, 2,566,186 shares issued and outstanding at December 31, 2020 | — | 16,802 | ||||||
Total temporary equity | — | 263,895 | ||||||
Stockholders’ equity (deficit) | ||||||||
Common stock, voting; par value $0.0001 per share, 315,000,000 shares authorized, 71,810,419 shares issued and outstanding at September 30, 2021; par value $0.01 per share, 55,659,643 shares authorized, 30,281,520 shares issued and outstanding at December 31, 2020 | 7 | 3 | ||||||
Additional paid-in capital | 413,316 | 135,616 | ||||||
Accumulated other comprehensive loss | (3,156 | ) | (1,677 | ) | ||||
Accumulated deficit | (126,200 | ) | (113,726 | ) | ||||
Total stockholders’ equity | 283,967 | 20,216 | ||||||
Total liabilities, temporary equity and stockholders’ equity | $ | 760,406 | $ | 700,019 | ||||
For the three months ended September 30, | For the nine months ended September 30, | For the three months ended March 31, | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | 2022 | 2021 | |||||||||||||||||||
Revenue | ||||||||||||||||||||||||
Services | $ | 48,428 | $ | 43,436 | $ | 139,866 | $ | 127,113 | $ | 47,506 | $ | 45,062 | ||||||||||||
Products | 19,450 | 11,821 | 44,053 | 29,184 | 21,435 | 10,235 | ||||||||||||||||||
Total revenue | 67,878 | 55,257 | 183,919 | 156,297 | 68,941 | 55,297 | ||||||||||||||||||
Cost of revenue | ||||||||||||||||||||||||
Cost of services | 17,379 | 15,675 | 51,417 | 47,594 | 17,529 | 16,211 | ||||||||||||||||||
Cost of products | 17,585 | 9,853 | 37,258 | 22,921 | 17,443 | 8,161 | ||||||||||||||||||
Total cost of revenue (exclusive of depreciation and amortization shown separately below) | 34,964 | 25,528 | 88,675 | 70,515 | 34,972 | 24,372 | ||||||||||||||||||
Operating expenses | ||||||||||||||||||||||||
Selling, general and administrative | 26,001 | 17,792 | 66,525 | 49,907 | 27,628 | 17,521 | ||||||||||||||||||
Depreciation and amortization | 12,440 | 13,176 | 37,947 | 38,884 | 13,196 | 13,114 | ||||||||||||||||||
Total operating expenses | 38,441 | 30,968 | 104,472 | 88,791 | 40,824 | 30,635 | ||||||||||||||||||
Operating loss | (5,527 | ) | (1,239 | ) | (9,228 | ) | (3,009 | ) | ||||||||||||||||
Operating income (loss) | (6,855 | ) | 290 | |||||||||||||||||||||
Interest expense, including amortization of deferred financing costs, net | 5,589 | 5,276 | 16,155 | 18,359 | 6,624 | 5,059 | ||||||||||||||||||
Change in fair value of warrant liability | (2,898 | ) | 651 | (5,281 | ) | 3,482 | (27 | ) | (2,424 | ) | ||||||||||||||
Loss before income taxes | (8,218 | ) | (7,166 | ) | (20,102 | ) | (24,850 | ) | (13,452 | ) | (2,345 | ) | ||||||||||||
Income tax provision (benefit) | ||||||||||||||||||||||||
Income tax expense (benefit) | ||||||||||||||||||||||||
Current | 179 | 201 | 569 | 711 | 1,306 | 102 | ||||||||||||||||||
Deferred | (3,889 | ) | (1,719 | ) | (8,197 | ) | (6,087 | ) | (3,851 | ) | (1,366 | ) | ||||||||||||
Total income tax benefit | (3,710 | ) | (1,518 | ) | (7,628 | ) | (5,376 | ) | (2,545 | ) | (1,264 | ) | ||||||||||||
Net loss | $ | (4,508 | ) | $ | (5,648 | ) | $ | (12,474 | ) | $ | (19,474 | ) | ||||||||||||
Net loss attributable to the Company | $ | (10,907 | ) | $ | (1,081 | ) | ||||||||||||||||||
Loss per share: | ||||||||||||||||||||||||
Basic | $ | (0.27 | ) | $ | (0.42 | ) | $ | (1.03 | ) | $ | (1.32 | ) | $ | (0.15 | ) | $ | (0.27 | ) | ||||||
Diluted | (0.27 | ) | (0.42 | ) | (1.03 | ) | (1.32 | ) | $ | (0.15 | ) | $ | (0.27 | ) | ||||||||||
Weighted average shares outstanding (in Number): | ||||||||||||||||||||||||
Weighted average number of shares outstanding: | ||||||||||||||||||||||||
Basic | 30,732,921 | 30,281,520 | 30,433,641 | 30,285,684 | 74,040,261 | 31,647,131 | ||||||||||||||||||
Diluted | 30,732,921 | 30,281,520 | 30,433,641 | 30,285,684 | 74,040,261 | 31,647,131 |
For the three months ended | ||||||||||||||||||||||||
For the three months ended September 30, | For the nine months ended September 30, | March 31, | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | 2022 | 2021 | |||||||||||||||||||
Net loss | $ | (4,508 | ) | $ | (5,648 | ) | $ | (12,474 | ) | $ | (19,474 | ) | $ | (10,907 | ) | $ | (1,081 | ) | ||||||
Other comprehensive income (loss): | ||||||||||||||||||||||||
Other comprehensive loss: | ||||||||||||||||||||||||
Foreign currency translation adjustment | (1,322 | ) | 1,387 | (1,479 | ) | (896 | ) | (184 | ) | (900 | ) | |||||||||||||
Comprehensive loss | $ | (5,830 | ) | $ | (4,261 | ) | $ | (13,953 | ) | $ | (20,370 | ) | $ | (11,091 | ) | $ | (1,981 | ) | ||||||
Series A Preferred Stock | Series A-1 Preferred Stock | Series B Preferred Stock | Series C Convertible Preferred Stock | Total Temporary Equity | Common Stock | Additional paid-in capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total Stockholders’ (Deficit) Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||
Temporary Equity | Stockholders’ Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Amount | Shares | Amount | Amount | Amount | Amount | Amount | ||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2020 (as previously reported) | 43 | $ | 77,562 | 60 | $ | 78,621 | 57 | $ | 90,910 | 17 | $ | 16,802 | $ | 263,895 | 218 | $ | 2 | $ | 135,617 | $ | (1,677 | ) | $ | (113,726 | ) | $ | 20,216 | |||||||||||||||||||||||||||||||||
Conversion of stock | 7,713 | — | 7,802 | — | 9,034 | — | 2,549 | — | — | 30,064 | 1 | (1 | ) | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2020, effect of reverse recapitalization | 7,756 | $ | 77,562 | 7,862 | $ | 78,621 | 9,091 | $ | 90,910 | 2,566 | $ | 16,802 | $ | 263,895 | 30,282 | $ | 3 | $ | 135,616 | $ | (1,677 | ) | $ | (113,726 | ) | $ | 20,216 | |||||||||||||||||||||||||||||||||
Repurchase of stock | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued dividends payable | 249 | 2,486 | 267 | 2,666 | 224 | 2,241 | — | — | 7,393 | — | — | (7,393 | ) | — | — | (7,393 | ) | |||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | — | — | — | — | — | — | — | — | (900 | ) | — | (900 | ) | |||||||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | — | — | — | — | — | — | 315 | — | — | 315 | |||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | — | — | — | (1,081 | ) | (1,081 | ) | |||||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2021 | 8,005 | $ | 80,048 | 8,129 | $ | 81,287 | 9,315 | $ | 93,151 | 2,566 | $ | 16,802 | $ | 271,288 | 30,282 | $ | 3 | $ | 128,538 | $ | (2,577 | ) | $ | (114,807 | ) | $ | 11,157 | |||||||||||||||||||||||||||||||||
Derecognition of shares | — | — | — | — | — | — | (46 | ) | (300 | ) | (300 | ) | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Accrued dividends payable | 251 | 2,514 | 270 | 2,695 | 232 | 2,323 | — | — | 7,532 | — | — | (7,532 | ) | — | — | (7,532 | ) | |||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | — | — | — | — | — | — | — | — | 743 | — | 743 | |||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | — | — | — | — | — | — | 315 | — | — | 315 | |||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | — | — | — | (6,885 | ) | (6,885 | ) | |||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2021 | 8,256 | $ | 82,562 | 8,399 | $ | 83,982 | 9,547 | $ | 95,474 | 2,520 | $ | 16,502 | $ | 278,520 | 30,282 | $ | 3 | $ | 121,321 | $ | (1,834 | ) | $ | (121,692 | ) | $ | (2,202 | ) | ||||||||||||||||||||||||||||||||
Redemption of stock | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Accrued dividends payable | 266 | 2,656 | 288 | 2,880 | 236 | 2,361 | — | — | 7,897 | — | — | (7,897 | ) | — | — | (7,897 | ) | |||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | — | — | — | — | — | — | — | — | (1,322 | ) | — | (1,322 | ) | |||||||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | — | — | — | — | — | — | (3,519 | ) | — | — | (3,519 | ) | |||||||||||||||||||||||||||||||||||||||||||
Distributions to and conversions of preferred stock | (8,522 | ) | (85,218 | ) | (8,687 | ) | (86,862 | ) | (9,783 | ) | (97,835 | ) | (2,520 | ) | (16,502 | ) | (286,417 | ) | 7,120 | 1 | 56,502 | — | — | 56,503 | ||||||||||||||||||||||||||||||||||||
CTAC shares recapitalized, net of equity issuance costs of $15,912 | — | — | — | — | — | — | — | — | — | 10,356 | 1 | 6,456 | — | — | 6,457 | |||||||||||||||||||||||||||||||||||||||||||||
Conversion of KORE warrants | — | — | — | — | — | — | — | — | — | 1,366 | — | 10,663 | — | — | 10,663 | |||||||||||||||||||||||||||||||||||||||||||||
Private offering and merger financing, net of equity issuance costs of $7,718 | — | — | — | — | — | — | — | — | — | 22,686 | 2 | 217,280 | — | — | 217,282 | |||||||||||||||||||||||||||||||||||||||||||||
Equity portion of convertible debt, net of issuance cost s of $224 | — | — | — | — | — | — | — | — | — | — | — | 12,510 | — | — | 12,510 | |||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | — | — | — | (4,508 | ) | (4,508 | ) | |||||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2021 | 0 | $ | 0 | 0 | $ | 0 | 0 | $ | 0 | 0 | $ | 0 | $ | 0 | 71,810 | $ | 7 | $ | 413,316 | $ | (3,156 | ) | $ | (126,200 | ) | $ | 283,967 | |||||||||||||||||||||||||||||||||
Common Stock | Additional paid-in capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total Stockholders’ Equity | ||||||||||||||||||||
Shares | Amount | Amount | Amount | Amount | Amount | |||||||||||||||||||
Balance at December 31, 2021 | 72,027,743 | $ | 7 | $ | 413,646 | $ | (3,331 | ) | $ | (138,179 | ) | $ | 272,143 | |||||||||||
Opening balance sheet adjustment | — | — | (11,612 | ) | — | 299 | (11,313 | ) | ||||||||||||||||
Adjusted opening balance | 72,027,743 | 7 | 402,034 | (3,331 | ) | (137,880 | ) | 260,830 | ||||||||||||||||
Foreign currency translation adjustment | — | — | — | (184 | ) | — | (184 | ) | ||||||||||||||||
Stock-based compensation | — | — | 2,050 | — | — | 2,050 | ||||||||||||||||||
Common stock issued pursuant to acquisition | 4,212,246 | 1 | 23,294 | — | — | 23,295 | ||||||||||||||||||
Net loss | — | — | — | — | (10,907 | ) | (10,907 | ) | ||||||||||||||||
Balance at March 31, 2022 | 76,239,989 | $ | 8 | $ | 427,378 | $ | (3,515 | ) | $ | (148,787 | ) | $ | 275,084 | |||||||||||
Series A Preferred Stock | Series A-1 Preferred Stock | Series B Preferred Stock | Series C Convertible Preferred Stock | Total Temporary Equity | ||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Amount | ||||||||||||||||||||||||||||
Balance at December 31, 2020 (as previously reported) | 43 | $ | 77,562 | 60 | $ | 78,621 | 57 | $ | 90,910 | 17 | $ | 16,802 | $ | 263,895 | ||||||||||||||||||||||
Conversion of stock | 7,713 | — | 7,802 | — | 9,034 | — | 2,549 | — | — | |||||||||||||||||||||||||||
Balance at December 31, 2020, effect of reverse recapitalization | 7,756 | $ | 77,562 | 7,862 | $ | 78,621 | 9,091 | $ | 90,910 | 2,566 | $ | 16,802 | $ | 263,895 | ||||||||||||||||||||||
Accrued dividends payable | 249 | 2,486 | 267 | 2,666 | 224 | 2,241 | — | — | 7,393 | |||||||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Balance at March 31, 2021 | 8,005 | $ | 80,048 | 8,129 | $ | 81,287 | 9,315 | $ | 93,151 | 2,566 | $ | 16,802 | $ | 271,288 | ||||||||||||||||||||||
Common Stock | Additional paid-in capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total Stockholders’ Equity | ||||||||||||||||||||
Shares | Amount | Amount | Amount | Amount | Amount | |||||||||||||||||||
Balance at December 31, 2020 (as previously reported) | 218 | $ | 2 | $ | 135,617 | $ | (1,677 | ) | $ | (113,726 | ) | $ | 20,216 | |||||||||||
Conversion of stock | 30,064 | 1 | (1 | ) | — | — | — | |||||||||||||||||
Balance at December 31, 2020, effect of reverse recapitalization | 30,282 | $ | 3 | $ | 135,616 | $ | (1,677 | ) | $ | (113,726 | ) | $ | 20,216 | |||||||||||
Accrued dividends payable | — | — | (7,393 | ) | — | — | (7,393 | ) | ||||||||||||||||
Foreign currency translation adjustment | — | — | — | (900 | ) | — | (900 | ) | ||||||||||||||||
Stock-based compensation | — | — | 315 | — | — | 315 | ||||||||||||||||||
Net loss | — | — | — | — | (1,081 | ) | (1,081 | ) | ||||||||||||||||
Balance at March 31, 2021 | 30,282 | $ | 3 | $ | 128,538 | $ | (2,577 | ) | $ | (114,807 | ) | $ | 11,157 | |||||||||||
Series A Preferred Stock | Series A-1 Preferred Stock | Series B Preferred Stock | Series C Convertible Preferred Stock | Total Temporary Equity | Common Stock | Additional paid-in capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total Stockholders’ (Deficit) Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||
Temporary Equity | Stockholders’ Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Amount | Shares | Amount | Amount | Amount | Amount | Amount | ||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2019 (as previously reported) | 43 | $ | 68,360 | 60 | $ | 69,495 | 57 | $ | 82,338 | 17 | $ | 16,802 | $ | 236,995 | 218 | $ | 2 | $ | 161,556 | $ | (3,792 | ) | $ | (78,526 | ) | $ | 79,240 | |||||||||||||||||||||||||||||||||
Conversion of Stock | 6,793 | — | 6,890 | — | 8,177 | — | 2,549 | — | — | 30,092 | 1 | (1 | ) | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Balanceat December 31, 2019, effect of reverse recapitalization | 6,836 | $ | 68,360 | 6,950 | 69,495 | 8,234 | 82,338 | 2,566 | 16,802 | 236,995 | 30,310 | 3 | 161,555 | (3,792 | ) | (78,526 | ) | 79,240 | ||||||||||||||||||||||||||||||||||||||||||
Repurchase of common stock | — | — | — | — | — | — | — | — | — | (28 | ) | — | (200 | ) | — | — | (200 | ) | ||||||||||||||||||||||||||||||||||||||||||
Accrued dividends payable | 222 | 2,216 | 238 | 2,383 | 205 | 2,053 | — | — | 6,652 | — | — | (6,652 | ) | — | — | (6,652 | ) | |||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | — | — | — | — | — | — | — | — | (3,113 | ) | — | (3,113 | ) | |||||||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | — | — | — | — | — | — | 216 | — | — | 216 | |||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | — | — | — | (2,768 | ) | (2,768 | ) | |||||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2020 | 7,058 | $ | 70,576 | 7,188 | $ | 71,878 | 8,439 | $ | 84,391 | 2,566 | $ | 16,802 | $ | 243,647 | 30,282 | $ | 3 | $ | 154,919 | $ | (6,905 | ) | $ | (81,294 | ) | $ | 66,723 | |||||||||||||||||||||||||||||||||
Accrued dividends payable | 222 | 2,215 | 238 | 2,382 | 210 | 2,104 | — | — | 6,701 | — | — | (6,701 | ) | — | — | (6,701 | ) | |||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | — | — | — | — | — | — | — | — | 830 | — | 830 | |||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | — | — | — | — | — | — | 315 | — | — | 315 | |||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | — | — | — | (11,058 | ) | (11,058 | ) | |||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2020 | 7,280 | $ | 72,791 | 7,426 | $ | 74,260 | 8,649 | $ | 86,495 | 2,566 | $ | 16,802 | $ | 250,348 | 30,282 | $ | 3 | $ | 148,533 | $ | (6,075 | ) | $ | (92,352 | ) | $ | 50,109 | |||||||||||||||||||||||||||||||||
Accrued dividends payable | 239 | 2,385 | 257 | 2,574 | 218 | 2,180 | — | — | 7,139 | — | — | (7,139 | ) | — | — | (7,139 | ) | |||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | — | — | — | — | — | — | — | — | 1,387 | — | 1,387 | |||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | — | — | — | — | — | — | 315 | — | — | 315 | |||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | — | — | — | (5,648 | ) | (5,648 | ) | |||||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2020 | 7,519 | $ | 75,176 | 7,683 | $ | 76,834 | 8,867 | $ | 88,675 | 2,566 | $ | 16,802 | $ | 257,487 | 30,282 | $ | 3 | $ | 141,709 | $ | (4,688 | ) | $ | (98,000 | ) | $ | 39,024 | |||||||||||||||||||||||||||||||||
Nine months ended September 30, | ||||||||
2021 | 2020 | |||||||
Cash flows from operating activities | ||||||||
Net loss | $ | (12,474 | ) | $ | (19,474 | ) | ||
Adjustments to reconcile net loss to net cash (used in) provided by operating activities | ||||||||
Depreciation and amortization | 37,947 | 38,884 | ||||||
Amortization of deferred financing costs | 1,569 | 1,584 | ||||||
Deferred income taxes | (8,197 | ) | (6,087 | ) | ||||
Non-cash foreign currency loss (gain) | (163 | ) | (1,356 | ) | ||||
Share-based compensation | 4,564 | 846 | ||||||
Provision for doubtful accounts | 117 | 888 | ||||||
Change in fair value of warrant liability | (5,281 | ) | 3,482 | |||||
Change in operating assets and liabilities, net of operating assets and liabilities acquired: | ||||||||
Accounts receivable | (12,792 | ) | (3,572 | ) | ||||
Inventories | (6,461 | ) | (2,668 | ) | ||||
Prepaid expenses and other receivables | (5,054 | ) | (2,485 | ) | ||||
Accounts payable and accrued liabilities | (2,366 | ) | 8,119 | |||||
Deferred revenue | (911 | ) | 307 | |||||
Income taxes payable | 63 | 225 | ||||||
Cash (used in) provided by operating activities | $ | (9,439 | ) | $ | 18,693 | |||
Cash flows used in investing activities | ||||||||
Additions to intangible assets | (6,626 | ) | (8,224 | ) | ||||
Additions to property and equipment | (3,156 | ) | (1,450 | ) | ||||
Acquisition of Integron LLC, net of cash acquired | — | 366 | ||||||
Net cash used in investing activities | $ | (9,782 | ) | $ | (9,308 | ) | ||
Cash flows from financing activities | ||||||||
Proceeds from revolving credit facility | 25,000 | 21,700 | ||||||
Repayments on revolving credit facility | (25,000 | ) | (25,000 | ) | ||||
Repayment of long-term debt | (2,373 | ) | (2,436 | ) | ||||
Proceeds from convertible debt | 82,351 | — | ||||||
Proceeds from equity portion of convertible debt , n e t of issuance costs | 12,510 | — | ||||||
Payment of deferred financingcosts, relating to convertible debt | (1,449 | ) | — | |||||
Repayment of related party note | (1,538 | ) | ||||||
Repurchase of common stock | — | (200 | ) | |||||
Proceeds from CTAC and PIPE financing, net of | 223,001 | — | ||||||
Settlement of preferred shares | (229,915 | ) | — | |||||
Payment of capital lease obligations | (815 | ) | (137 | ) | ||||
Cash provided by (used in) financing activities | $ | 81,772 | $ | (6,073 | ) | |||
Effect of Exchange Rate Change on Cash and Cash Equivalents | (188 | ) | (88 | ) | ||||
Change in Cash and Cash Equivalents and Restricted Cash | 62,363 | 3,224 | ||||||
Cash and Cash Equivalents and Restricted Cash, beginning of period | 10,693 | 8,692 | ||||||
Cash and Cash Equivalents and Restricted Cash, end of period | $ | 73,056 | $ | 11,916 | ||||
Non-cash financing activities: | ||||||||
Capital leases | $ | 346 | $ | 263 | ||||
Equity financing fees accrued | 3,025 | — | ||||||
Common shares issued to preferred shareholders | 56,502 | — | ||||||
Equity financing fees settled in common shares | 1,863 | — | ||||||
Common shares issued to warrant holders | 10,663 | — | ||||||
Supplemental cash flow information: | ||||||||
Interest paid | $ | 14,762 | $ | 16,879 |
For the three months ended | ||||||||
March 31, | ||||||||
2022 | 2021 | |||||||
Cash flows from operating activities | ||||||||
Net loss | $ | (10,907 | ) | $ | (1,081 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities | ||||||||
Depreciation and amortization | 13,196 | 13,114 | ||||||
Amortization of deferred financing costs | 587 | 524 | ||||||
Non-cash reduction to the operating lease right-of-use assets | 587 | 0 | ||||||
Deferred income taxes | (3,851 | ) | (1,366 | ) | ||||
Non-cash foreign currency loss | (3 | ) | (70 | ) | ||||
Share-based compensation | 2,050 | 315 | ||||||
Provision for doubtful accounts | 55 | (18 | ) | |||||
Change in fair value of warrant liability | (27 | ) | (2,424 | ) | ||||
Change in operating assets and liabilities, net of operating assets and liabilities acquired: | ||||||||
Accounts receivable | (2,580 | ) | (1,855 | ) | ||||
Inventories | 4,714 | (878 | ) | |||||
Prepaid expenses and other receivables | 806 | (5,375 | ) | |||||
Accounts payable and accrued liabilities | (8,428 | ) | (13,311 | ) | ||||
Deferred revenue | 132 | (81 | ) | |||||
Income taxes payable | 199 | 186 | ||||||
Operating lease liabilities | (510 | ) | 0 | |||||
Net cash used in operating activities | $ | (3,980 | ) | $ | (12,320 | ) | ||
Cash flows used in investing activities | ||||||||
Additions to intangible assets | (2,790 | ) | (2,302 | ) | ||||
Additions to property and equipment | (635 | ) | (789 | ) | ||||
Payments for acquisitions, net of cash acquired | (45,078 | ) | 0 | |||||
Net cash used in investing activities | $ | (48,503 | ) | $ | (3,091 | ) | ||
Cash flows from financing activities | ||||||||
Proceeds from revolving credit facility | 0 | 20,000 | ||||||
Repayment of term loan | (788 | ) | (797 | ) | ||||
Repayment of other borrowings—notes payable | (118 | ) | 0 | |||||
Equity financing fees | (126 | ) | (445 | ) | ||||
Payment of deferred financing costs | (452 | ) | (79 | ) | ||||
Payment of financing lease obligations | (66 | ) | 0 | |||||
Payment of capital lease obligations | 0 | (388 | ) | |||||
Net cash provided by/(used in) financing activities | $ | (1,550 | ) | $ | 18,291 | |||
Effect of Exchange Rate Change on Cash and Cash Equivalents | (26 | ) | (67 | ) | ||||
Change in Cash and Cash Equivalents and Restricted Cash | (54,059 | ) | 2,813 | |||||
Cash and Cash Equivalents and Restricted Cash, beginning of period | 86,343 | 10,693 | ||||||
Cash and Cash Equivalents and Restricted Cash, end of period | $ | 32,284 | $ | 13,506 | ||||
Supplemental cash flow information: | ||||||||
Interest paid | $ | 7,717 | $ | 4,549 | ||||
Taxes paid | 317 | — | ||||||
Non-cash investing and financing activities: | ||||||||
Fair value of KORE common stock issued pursuant to acquisitions | $ | 23,295 | $ | — | ||||
ASU 2020-06 Adoption | 15,163 | — | ||||||
Operating lease right-of-use assets obtained in exchange for new operating lease liabilities upon the adoption of ASC 842 | 9,604 | |||||||
Operating lease right-of-use | 420 | — | ||||||
Equity financing fees accrued | — | 1,590 |
(in ‘000 USD) | At December 31, 2021 | Adjustments due to Topic 842 | At January 1 2022 | |||||||||
Operating lease right-of-use | $ | 0 | $ | 9,278 | $ | 9,278 | ||||||
Current operating lease liabilities | 0 | 2,121 | 2,121 | |||||||||
Non-current operating lease liabilities | 0 | 7,483 | 7,483 | |||||||||
Current portion of capital lease liabilities | 191 | (191 | ) | 0 | ||||||||
Current portion of finance lease liabilities | 0 | 191 | 191 | |||||||||
Non-current portion of capital leaseliabilities | 264 | (264 | ) | 0 | ||||||||
Non-current portion of finance leaseliabilities | 0 | 264 | 264 | |||||||||
Accrued liabilities | 21,502 | (326 | ) | 21,176 |
(in ‘000 USD) | At December 31, 2021 | Adjustments due to ASU 2020-06 | At January 1 2022 | |||||||||
Long-term debt and other borrowings, net | $ | 399,115 | $ | 15,163 | $ | 414,278 | ||||||
Additional paid-in capital | 413,646 | (11,612 | ) | 402,034 | ||||||||
Deferred tax | 36,722 | (3,847 | ) | 32,875 | ||||||||
Retained earnings | (138,179 | ) | 299 | (137,880 | ) |
(in ‘000 USD) | For the three months ended March 31, | |||||||
2022 | 2021 | |||||||
Connectivity* | $ | 43,016 | $ | 40,591 | ||||
Hardware Sales | 19,012 | 7,796 | ||||||
Hardware Sales—bill-and-hold | 2,422 | 2,439 | ||||||
Deployment services, professional services, and other | 4,491 | 4,471 | ||||||
Total | $ | 68,941 | $ | 55,297 | ||||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
(in ‘000) | 2021 | 2020 | 2021 | 2020 | ||||||||||||
Connectivity* | $ | 40,738 | $ | 37,932 | $ | 122,444 | $ | 111,583 | ||||||||
Hardware Sales | 19,221 | 9,345 | 40,602 | 23,276 | ||||||||||||
Hardware Sales - bill-and-hold | 229 | 2,476 | 3,451 | 5,908 | ||||||||||||
Deployment services, professional services and other | 7,690 | 5,504 | 17,422 | 15,530 | ||||||||||||
Total | $ | 67,878 | $ | 55,257 | $ | 183,919 | $ | 156,297 | ||||||||
* | Includes connectivity-related |
Shares | Percentage | |||||||
Pre-combination KORE shareholders | 38,767,500 | 54.0 | % | |||||
Public stockholders | 10,356,593 | 14.4 | % | |||||
Private offering and merger financing | 22,686,326 | 31.6 | % | |||||
Total | 71,810,419 | 100.0 | % |
Shares | Percentage | |||||||
Pre-combination KORE shareholders | 38,767,500 | 54.0 | % | |||||
Public stockholders | 10,356,593 | 14.4 | % | |||||
Private offering and merger financing | 22,686,326 | 31.6 | % | |||||
Total | 71,810,419 | 100.0 | % | |||||
(in 000’ USD) | Classification in Statement of operations | Three Months Ended March 31, 2022 | ||||||
Operating lease cost | Selling, general and administrative | $ | 844 | |||||
Finance lease cost | ||||||||
Amortization of leased assets | Depreciation and amortization | 98 | ||||||
Interest on lease liabilities | Interest expense | 5 | ||||||
Total net lease cost | $ | 947 | ||||||
(in 000’ USD) | As of March 31, 2022 | |||
Assets | ||||
Finance lease right-of-use assets included in property and equipment, net | $ | 386 | ||
Liabilities | ||||
Current portion of finance lease liabilities | $ | 158 | ||
Non-current portion of finance lease liabilities | 228 | |||
Total finance lease liabilities | $ | 386 | ||
At March 31, 2022 | ||||
Weighted average remaining lease term (in years) | ||||
Operating leases | 6.4 | |||
Finance leases | 2.5 | |||
Weighted average discount rate: | ||||
Operating leases | 7.1 | % | ||
Finance leases | 5.2 | % |
Operating Leases | Finance Leases | |||||||
(in ‘000 USD) | Amount | Amount | ||||||
From April 1, 2022 to December 31, 2022 | $ | 1,969 | $ | 130 | ||||
2023 | 2,189 | 141 | ||||||
2024 | 1,476 | 118 | ||||||
2025 | 1,313 | 25 | ||||||
2026 | 1,041 | 0 | ||||||
Thereafter | 4,141 | 0 | ||||||
Total minimum lease payments | 12,129 | 414 | ||||||
Interest expense | (2,672 | ) | (28 | ) | ||||
Total | $ | 9,457 | $ | 386 | ||||
Cash, (net of closing cash of $1,995) and working capital adjustments | $ | 45,078 | ||
Fair value of KORE common stock issued to sellers (4,212,246 shares) | 23,295 | |||
Total consideration | $ | 68,373 | ||
Assets acquired: | ||||
Accounts receivable | 3,303 | |||
Inventories | 1,323 | |||
Prepaid expenses and other receivables | 976 | |||
Property and equipment | 201 | |||
Intangible assets | 28,664 | |||
Total Assets acquired | 34,467 | |||
Liabilities assumed: | ||||
Deferred tax liabilities | 7,391 | |||
Accounts payable and accrued liabilities | 3,562 | |||
Liabilities assumed | 10,953 | |||
Net identifiable assets acquired | 23,514 | |||
Goodwill (excess of consideration transferred over net identifiable assets acquired) | $ | 44,859 | ||
Post ASU 2020-06 As of March 31, | Pre ASU 2020-06 As of December 31, | |||||||
(in ‘000 USD) | 2022 | 2021 | ||||||
Principal balances outstanding | $ | 120,000 | $ | 120,000 | ||||
Net of unamortized debt issuance costs | 2,744 | 2,458 | ||||||
Net of unamortized equity component costs | 0 | 15,517 | ||||||
Net carrying amount(1) | $ | 117,256 | $ | 102,025 | ||||
(in ‘000) | Amount | |||
From October 1, 2021 to December 31, 2021 | $ | 781 | ||
2022 | 2,437 | |||
2023 | 1,448 | |||
2024 | 1,076 | |||
2025 | 749 | |||
Thereafter | 2,157 | |||
Total | $ | 8,648 | ||
(in ‘000) | Amount | |||
From October 1, 2021 to December 31, 2021 | $ | 15,195 | ||
2022 | 6,871 | |||
2023 | 1,286 | |||
2024 | 1,286 | |||
2025 | 1,286 | |||
Total | $ | 25,924 | ||
September 30, 2021 | December 31, 2020 | |||||||
Prepaid Deposits | $ | 4,906 | $ | 1,734 | ||||
Prepaid Expenses | 5,598 | 3,695 | ||||||
Other Receivables | 4,036 | 0 | ||||||
Total Prepaid Expenses and Other Receivables | $ | 14,540 | $ | 5,429 | ||||
(in ‘000) | Series A | Series A-1 | Series B | |||||||||
Accumulated and unpaid, December 31, 2020 | $ | 34,812 | $ | 18,608 | $ | 33,910 | ||||||
Accumulated | 2,486 | 2,666 | 2,241 | |||||||||
Distributed | 0 | 0 | 0 | |||||||||
Accumulated and unpaid, March 31, 2021 | $ | 37,298 | $ | 21,274 | $ | 36,151 | ||||||
Accumulated | 2,514 | 2,695 | 2,323 | |||||||||
Distributed | 0 | 0 | 0 | |||||||||
Accumulated and unpaid, June 30, 2021 | $ | 39,812 | $ | 23,969 | $ | 38,474 | ||||||
Accumulated | 2,656 | 2,880 | 2,361 | |||||||||
Distributed | (42,468 | ) | (26,849 | ) | (40,835 | ) | ||||||
Accumulated and unpaid, September 30, 2021 | $ | 0 | $ | 0 | $ | 0 | ||||||
(in ‘000) | Series A | Series A-1 | Series B | |||||||||
Accumulated and unpaid, December 31, 2019 | $ | 25,610 | $ | 8,794 | $ | 25,338 | ||||||
Accumulated | 2,216 | 2,359 | 2,053 | |||||||||
Distributed | 0 | 0 | 0 | |||||||||
Accumulated and unpaid, March 31, 2020 | $ | 27,826 | $ | 11,153 | $ | 27,391 | ||||||
Accumulated | 2,215 | 2,359 | 2,104 | |||||||||
Distributed | 0 | 0 | 0 | |||||||||
Accumulated and unpaid, June 30, 2020 | $ | 30,041 | $ | 13,512 | $ | 29,495 | ||||||
Accumulated | 2,385 | 2,548 | 2,180 | |||||||||
Distributed | 0 | 0 | 0 | |||||||||
Accumulated and unpaid, September 30, 2020 | 32,426 | 16,060 | 31,675 | |||||||||
(in ‘000 USD) | Series A | Series A-1 | Series B | |||||||||
Accumulated and unpaid, December 31, 2020 | $ | 34,812 | $ | 18,608 | $ | 33,910 | ||||||
Accumulated | 2,486 | 2,666 | 2,241 | |||||||||
Distributed | 0 | 0 | 0 | |||||||||
Accumulated and unpaid, March 31, 2021 | $ | 37,298 | $ | 21,274 | $ | 36,151 | ||||||
Number of Options | Weighted Average Grant Date Fair Value per Option (Amount) | Weighted Average Exercise Price (Amount) | Weighted Average Remaining Contractual Term (Years) | |||||||||||||
Balance, December 31, 2020 | 34,977 | 191 | $ | 1,750 | 7.7 | |||||||||||
Granted | — | — | — | — | ||||||||||||
Exercised | — | — | — | — | ||||||||||||
Forfeited | — | — | — | — | ||||||||||||
Expired | — | — | — | — | ||||||||||||
Cancelled | (34,977 | ) | (191 | ) | (1,750 | ) | (7.7 | ) | ||||||||
Balance, September 30, 2021 | 0 | $ | 0 | $ | 0 | — | ||||||||||
Number of Options | Weighted Average Grant Date Fair Value per Option (Amount) | Weighted Average Exercise Price (Amount) | Weighted Average Remaining Contractual Term (Years) | |||||||||||||
Balance, December 31, 2019 | 32,280 | 196 | $ | 1,750 | 8.4 | |||||||||||
Granted | 5,181 | 167 | 1,750 | — | ||||||||||||
Exercised | — | — | — | — | ||||||||||||
Forfeited | (2,484 | ) | 195 | 1,750 | — | |||||||||||
Expired | — | — | — | — | ||||||||||||
Balance, September 30, 2020 | 34,977 | $ | 191 | $ | 1,750 | 7.9 | ||||||||||
Number of Options | Weighted Average Grant Date Fair Value per Option (Amount) | Weighted Average Exercise Price (Amount) | Weighted Average Remaining Contractual Term (Years) | |||||||||||||
Balance, December 31, 2020 | 432,500 | $ | 15.45 | $ | 141.53 | 7.7 | ||||||||||
Granted | 0 | 0 | 0 | — | ||||||||||||
Exercised | — | — | — | — | ||||||||||||
Forfeited | 0 | 0 | 0 | — | ||||||||||||
Expired | — | — | — | — | ||||||||||||
Balance, March 31, 2021 | 432,500 | $ | 15.45 | $ | 141.53 | 7.7 | ||||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
(in ‘000) | 2021 | 2020 | 2021 | 2020 | ||||||||||||
Total share-based compensation expense | $ | 3,933 | $ | 315 | $ | 4,564 | $ | 846 |
For the three months ended | ||||||||
March 31, | ||||||||
(in ‘000 USD) | 2022 | 2021 | ||||||
Total Stock Compensation Expense | $ | 0 | $ | 315 | ||||
Unrecognized Compensation Cost | 0 | 3,100 | ||||||
Weighted-average remaining recognition period (in years) | — | 2.4 |
(in 000’ USD, except shares) | Number of Awards outstanding | Weighted- Average grant date fair value (per share) | Aggregate Intrinsic Value (in Thousands) | |||||||||
Unvested RSUs at December 31, 2021 | 0 | $ | 0 | 0 | ||||||||
Granted | 4,763 | 6.84 | 32,587 | |||||||||
Vested | 0 | 0 | 0 | |||||||||
Forfeited and canceled | (35 | ) | 6.97 | (245 | ) | |||||||
Unvested RSUs at March 31, 2022 | 4,728 | $ | $ | 32,342 | ||||||||
Three months ended | March 31, | |||
(in ‘000 USD) | 2022 | |||
Expected volatility | 57.1%-75.2% | |||
Risk-free interest rate | 1.37%-2.09% |
For the three months ended | ||||||||
March 31, | ||||||||
(in ‘000 USD) | 2022 | 2021 | ||||||
Total Stock Compensation Expense | $ | 2,050 | $ | 0 | ||||
Unrecognized Compensation Cost | 30,292 | 0 | ||||||
Weighted-average remaining recognition period (in years) | 3.53 | — |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
(in ‘000) | 2021 | 2020 | 2021 | 2020 | ||||||||||||
Numerator: | ||||||||||||||||
Net loss attributable to the Company | $ | (4,508 | ) | $ | (5,648 | ) | $ | (12,474 | ) | $ | (19,474 | ) | ||||
Less dividends to preferred shareholder | (7,897 | ) | (7,139 | ) | (22,822 | ) | (20,492 | ) | ||||||||
Add premium on preferred conversion to common shares | 4,074 | |||||||||||||||
Net loss attributable to common shareholders | $ | (8,331 | ) | $ | (12,787 | ) | $ | (31,222 | ) | $ | (39,966 | ) | ||||
Denominator: | ||||||||||||||||
Weighted average common shares, basic and diluted (in number) | 30,732,921 | 30,281,520 | 30,433,641 | 30,285,684 | ||||||||||||
Net loss per share attributable to common shareholder, basic and diluted | $ | (0.27 | ) | $ | (0.42 | ) | $ | (1.03 | ) | $ | (1.32 | ) | ||||
For the three months ended | ||||||||
March 31, | ||||||||
(in 000’ USD, except share and per share amounts) | 2022 | 2021 | ||||||
Numerator: | ||||||||
Net loss attributable to the Company | $ | (10,907 | ) | $ | (1,081 | ) | ||
Less cumulative earnings to preferred shareholder | 0 | (7,393 | ) | |||||
Net loss attributable to common stockholders | (10,907 | ) | (8,474 | ) | ||||
Denominator: | ||||||||
Weighted average common shares and warrants outstanding | ||||||||
Basic (in number) | 74,040,261 | 31,647,131 | ||||||
Diluted (in number) | 74,040,261 | 31,647,131 | ||||||
Net loss per unit attributable to common stockholder | ||||||||
Basic | $ | (0.15 | ) | $ | (0.27 | ) | ||
Diluted | $ | (0.15 | ) | $ | (0.27 | ) |
(number of shares) | September 30, 2021 | September 30, 2020 | ||||||
Series C Convertible Preferred Stock | 0 | 2,566,186 | ||||||
Stock Options | 0 | 432,500 |
For the three months ended | ||||||||
(Number of shares) | March 31, | |||||||
2022 | 2021 | |||||||
Series C Convertible Preferred Stock | 0 | 2,566,186 | ||||||
Stock Options | 0 | 432,500 | ||||||
Common stock issued under the Backstop Agreement | 9,600,031 | 0 | ||||||
Restricted stock grants with only service conditions | 3,108,277 | 0 |
For the period ended (in ‘000) | September 30, 2021 | December 31, 2020 | ||||||
Interfusion B.V. | $ | 0 | $ | 985 | ||||
T-Fone B.V. | $ | 0 | $ | 630 |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
For three months ended September 30, | For nine months ended September 30, | Three months ended March 31, | Change March 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
(in ‘000) | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
(in ‘000 USD) | 2022 | 2021 | $ | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Services | $ | 48,428 | 71 | % | $ | 43,436 | 79 | % | $ | 139,866 | 76 | % | $ | 127,113 | 81 | % | $ | 47,506 | 69 | % | $ | 45,062 | 81 | % | $ | 2,444 | 5 | % | ||||||||||||||||||||||||||||
Products | 19,450 | 29 | % | 11,821 | 21 | % | 44,053 | 24 | % | 29,184 | 19 | % | 21,435 | 31 | % | 10,235 | 19 | % | 11,200 | 109 | % | |||||||||||||||||||||||||||||||||||
Total revenue | $ | 67,878 | 100 | % | $ | 55,257 | 100 | % | $ | 183,919 | 100 | % | $ | 156,297 | 100 | % | ||||||||||||||||||||||||||||||||||||||||
Total Revenue | $ | 68,941 | 100 | % | $ | 55,297 | 100 | % | $ | 13,644 | 25 | % | ||||||||||||||||||||||||||||||||||||||||||||
Three months ended March 31, | Change March 31, 2022 | |||||||||||||||||||||||
(in ‘000 USD) | 2022 | 2021 | $ | % | ||||||||||||||||||||
IoT Connectivity | $ | 44,098 | 64 | % | $ | 40,720 | 74 | % | $ | 3,378 | 8 | % | ||||||||||||
IoT Solutions | 24,843 | 36 | % | 14,577 | 26 | % | 10,266 | 70 | % | |||||||||||||||
Total Revenue | $ | 68,941 | 100 | % | $ | 55,297 | 100 | % | $ | 13,644 | 25 | % | ||||||||||||
For three months ended September 30, | For nine months ended September 30, | |||||||||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||||||||
IoT Connectivity | $ | 41,542 | 61 | % | $ | 39,604 | 72 | % | $ | 125,590 | 68 | % | $ | 115,180 | 74 | % | ||||||||||||||||
IoT Solutions | 26,336 | 39 | % | 15,653 | 28 | % | 58,329 | 32 | % | 41,117 | 26 | % | ||||||||||||||||||||
Total revenue | $ | 67,878 | 100 | % | $ | 55,257 | 100 | % | $ | 183,919 | 100 | % | $ | 156,297 | 100 | % | ||||||||||||||||
Period End Connections Count | 13.6 million | 11.0 million | 13.6 million | 11.0 million | ||||||||||||||||||||||||||||
Average Connections Count for the Period | 13.5 million | 10.8 million | 13.1 million | 10.2 million |
For three months ended March 31, | ||||||||
2022 | 2021 | |||||||
Period End Connections | 15.3 million | 12.9 million | ||||||
Average Connections Count for the Period | 15.1 million | 12.7 million |
For three months ended | For nine months ended | Three months ended March 31, | Change March 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
September 30, | Change | September 30, | Change | |||||||||||||||||||||||||||||||||||||||||||||||||||||
(in ‘000) | 2021 | 2020 | Dollars | % | 2021 | 2020 | Dollars | % | ||||||||||||||||||||||||||||||||||||||||||||||||
(in ‘000 USD) | 2022 | 2021 | $ | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Cost of services | $ | 17,379 | $ | 15,675 | 1,704 | 11 | % | $ | 51,417 | $ | 47,594 | 3,823 | 8 | % | $ | 17,529 | 50 | % | $ | 16,211 | 67 | % | $ | 1,318 | 8 | % | ||||||||||||||||||||||||||||||
Cost of products | 17,585 | 9,853 | 7,732 | 78 | % | 37,258 | 22,921 | 14,337 | 63 | % | 17,443 | 50 | % | 8,161 | 33 | % | 9,282 | 114 | % | |||||||||||||||||||||||||||||||||||||
Total cost of revenue | $ | 34,964 | $ | 25,528 | $ | 9,436 | 37 | % | $ | 88,675 | $ | 70,515 | 18,160 | 26 | % | $ | 34,972 | 100 | % | $ | 24,372 | 100 | % | $ | 10,600 | 43 | % | |||||||||||||||||||||||||||||
For three months ended March 31, | ||||||||
Gross margin rate | 2022 | 2021 | ||||||
Cost of services | 63 | % | 64 | % | ||||
Cost of products | 19 | % | 20 | % | ||||
Total gross margins | 49 | % | 56 | % |
For three months ended | For nine months ended | Three months ended March 31, | Change March 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
September 30, | Change | September 30, | Change | |||||||||||||||||||||||||||||||||||||||||||||||||||||
(in ‘000) | 2021 | 2020 | Dollars | % | 2021 | 2020 | Dollars | % | ||||||||||||||||||||||||||||||||||||||||||||||||
(in ‘000 USD) | 2022 | 2021 | $ | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Cost of IoT Connectivity | $ | 16,111 | $ | 15,475 | 636 | 4 | % | $ | 48,729 | $ | 45,975 | 2,754 | 6 | % | $ | 16,870 | 48 | % | $ | 15,332 | 63 | % | $ | 1,538 | 10 | % | ||||||||||||||||||||||||||||||
Cost of IoT Solutions | 18,853 | 10,053 | 8,800 | 88 | % | 39,946 | 24,540 | 15,406 | 63 | % | 18,102 | 52 | % | 9,040 | 37 | % | 9,062 | 100 | % | |||||||||||||||||||||||||||||||||||||
Total cost of revenue | $ | 34,964 | $ | 25,528 | 9,436 | 37 | % | $ | 88,675 | $ | 70,515 | 18,160 | 26 | % | $ | 34,972 | 100 | % | $ | 24,372 | 100 | % | $ | 10,600 | 43 | % | ||||||||||||||||||||||||||||||
Three months ended March 31, | ||||||||
Gross margin rate | 2022 | 2021 | ||||||
IoT Connectivity | 62 | % | 62 | % | ||||
IoT Solutions | 27 | % | 38 | % | ||||
Total gross margins | 49 | % | 56 | % |
For three months ended | For nine months ended | |||||||||||||||||||||||||||||||
September 30, | Change | September 30 | Change | |||||||||||||||||||||||||||||
(in ‘000) | 2021 | 2020 | Dollars | % | 2021 | 2020 | Dollars | % | ||||||||||||||||||||||||
Selling, general and administrative expenses | $ | 26,001 | $ | 17,792 | 8,209 | 46 | % | $ | 66,525 | $ | 49,907 | 16,618 | 33 | % |
Three months ended March 31, | Change | |||||||||||||||
(in ‘000 USD) | 2022 | 2021 | $ | % | ||||||||||||
Selling, general, and administrative | $ | 27,628 | $ | 17,521 | $ | 10,107 | 58 | % |
For three months ended | For nine months ended | Three months ended March 31, | Change | |||||||||||||||||||||||||||||||||||||||||||||
September 30, | Change | September 30, | Change | |||||||||||||||||||||||||||||||||||||||||||||
(in ‘000) | 2021 | 2020 | Dollars | % | 2021 | 2020 | Dollars | % | ||||||||||||||||||||||||||||||||||||||||
(in ‘000 USD) | 2022 | 2021 | $ | % | ||||||||||||||||||||||||||||||||||||||||||||
Depreciation and amortization | $ | 12,440 | $ | 13,176 | (736 | ) | (6 | )% | $ | 37,947 | $ | 38,884 | (937 | ) | (2 | )% | $ | 13,196 | $ | 13,114 | $ | 82 | 1 | % |
For three months ended | For nine months ended | |||||||||||||||||||||||||||||||
September 30, | Change | September 30, | Change | |||||||||||||||||||||||||||||
(in ‘000) | 2021 | 2020 | Dollars | % | 2021 | 2020 | Dollars | % | ||||||||||||||||||||||||
Interest expense including amortization of deferred financing costs, net | $ | (5,589 | ) | $ | (5,276 | ) | (313 | ) | 6 | % | $ | (16,155 | ) | $ | (18,359 | ) | 2,204 | (12 | )% | |||||||||||||
Change in fair value of warrant liability | 2,898 | (651 | ) | 3,549 | (545 | )% | 5,281 | (3,482 | ) | 8,763 | (252 | )% | ||||||||||||||||||||
Total other income (expense) | $ | (2,691 | ) | $ | (5,927 | ) | 3,236 | (55 | )% | $ | (10,874 | ) | $ | (21,841 | ) | 10,967 | (50 | )% | ||||||||||||||
Three months ended March 31, | Change | |||||||||||||||
(in ‘000 USD) | 2022 | 2021 | $ | % | ||||||||||||
Interest expense, including amortization of deferred financing costs, net | $ | 6,624 | $ | 5,059 | $ | 1,565 | 31 | % | ||||||||
Change in fair value of warrant liability | (27 | ) | (2,424 | ) | 2,397 | (99 | )% | |||||||||
Total other expense | $ | 6,597 | $ | 2,635 | $ | 3,962 | 150 | % | ||||||||
For three months ended | For nine months ended | Three months ended March 31, | Change | |||||||||||||||||||||||||||||||||||||||||||||
September 30, | Change | September 30, | Change | |||||||||||||||||||||||||||||||||||||||||||||
(in ‘000) | 2021 | 2020 | Dollars | % | 2021 | 2020 | Dollars | % | ||||||||||||||||||||||||||||||||||||||||
(in ‘000 USD) | 2022 | 2021 | $ | % | ||||||||||||||||||||||||||||||||||||||||||||
Income tax benefit | $ | (3,710 | ) | $ | (1,518 | ) | (2,192 | ) | 144 | % | $ | (7,628 | ) | $ | (5,376 | ) | (2,252 | ) | 42 | % | $ | (2,545 | ) | $ | (1,264 | ) | $ | (1,281 | ) | 101 | % |
For the three months ended | ||||||||||||
March 31, | ||||||||||||
(in ‘000 USD) | 2022 | 2021 | $ Change | |||||||||
Cash flows from operating activities | ||||||||||||
Net loss | $ | (10,907 | ) | $ | (1,081 | ) | (9,826 | ) | ||||
Net cash used in operating activities | (3,980 | ) | (12,320 | ) | 8,340 | |||||||
Net cash used in investing activities | (48,503 | ) | (3,091 | ) | (45,412 | ) | ||||||
Net cash provided by/(used in) financing activities | (1,550 | ) | 18,291 | (19,841 | ) | |||||||
Effect of Exchange Rate Change on Cash and Cash Equivalents | (26 | ) | (67 | ) | 41 | |||||||
Change in Cash and Cash Equivalents and Restricted Cash | (54,059 | ) | 2,813 | (56,872 | ) | |||||||
Cash and Cash Equivalents and Restricted Cash, beginning of period | 86,343 | 10,693 | 75,650 | |||||||||
Cash and Cash Equivalents and Restricted Cash, end of period | $ | 32,284 | $ | 13,506 | 18,778 |
(in ‘000) | ||||||||||||||||||||||||
For the three months ended September 30, | For the nine months ended September 30, | |||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | For the three Months Ended March 31, | ||||||||||||||||||||
(in ‘000 USD) | 2022 | 2021 | ||||||||||||||||||||||
Net loss | $ | (4,508 | ) | (5,648 | ) | $ | (12,474 | ) | $ | (19,474 | ) | $ | (10,907 | ) | $ | (1,081) | ||||||||
Income tax expense (benefit) | (3,710 | ) | (1,518 | ) | (7,628 | ) | (5,376 | ) | ||||||||||||||||
Income tax benefit | (2,545 | ) | (1,264 | ) | ||||||||||||||||||||
Interest expense | 5,589 | 5,276 | 16,155 | 18,359 | 6,624 | 5,059 | ||||||||||||||||||
Depreciation and amortization | 12,440 | 13,176 | 37,947 | 38,884 | 13,196 | 13,114 | ||||||||||||||||||
EBITDA | 9,811 | 11,286 | 34,000 | 32,393 | 6,368 | 15,828 | ||||||||||||||||||
Change in fair value of warrant liabilities (non-cash) | (2,898 | ) | 651 | (5,281 | ) | 3,482 | ||||||||||||||||||
Transformation expense | 2,424 | 1,608 | 6,174 | 5,448 | ||||||||||||||||||||
Change in Fair value of warrant liabilities (non-cash) | (27 | ) | (2,424 | ) | ||||||||||||||||||||
Transformation expenses | 1,565 | 1,803 | ||||||||||||||||||||||
Acquisition and integration-related restructuring costs | 2,772 | 1,002 | 7,290 | 3,399 | 5,293 | 851 | ||||||||||||||||||
Stock-based compensation (non-cash) | 3,933 | 315 | 4,564 | 846 | 2,050 | 315 | ||||||||||||||||||
Foreign currency loss (gain) (non-cash) | (240 | ) | 328 | (163 | ) | (1,356 | ) | |||||||||||||||||
Foreign currency loss (non-cash) | (3 | ) | (70 | ) | ||||||||||||||||||||
Other | 94 | 179 | 390 | 289 | 395 | 115 | ||||||||||||||||||
Adjusted EBITDA | 15,896 | 15,369 | $ | 46,974 | $ | 44,501 | $ | 15,641 | $ | 16,418 | ||||||||||||||
Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
Item 4. | Controls and Procedures |
Item 1. | Legal Proceedings. |
Item 1A. | Risk Factors. |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds. |
Item 5. | Other Information. |
Item 6. | Exhibits. |
* | Filed herewith. |
** | Furnished herewith. |
KORE Group Holdings, Inc. | ||||||
Date: | By: | /s/ Romil Bahl | ||||
Romil Bahl | ||||||
President and Chief Executive Officer (Principal Executive Officer) |
Date: | By: | /s/ | ||||
Executive Vice President Financial Officer and Treasurer (Principal Financial Officer) |